Abstract

http://ssrn.com/abstract=880762
 


 



The Creation of FirstCity Financial Corporation: A Clinical Study of the Bankruptcy Process


Ramesh K. S. Rao


University of Texas at Austin - Department of Finance

Susan V. White


University of Maryland - Department of Finance


International Journal of Finance Education, Vol. 1, No. 1, 2005

Abstract:     
This paper examines the bankruptcy of FirstCity Bancorporation of Texas and its subsequent emergence, through a merger, as FirstCityFinancial Corporation (FCFC). It illustrates several interrelated issues: a) how informational asymmetries and disagreements among the various claimants were efficiently resolved through the use of a Court's Expert, b) why a merger was critical for the success of the reorganization plan, c) the process by which the claims were valued, and d) the steps taken by the Court to ensure that the "best interests test" was satisfied under the reorganization plan.

Keywords: Bankruptcy, confirmation, First City, best interests test, reorganization

JEL Classification: G33, G34

Accepted Paper Series





Not Available For Download

Date posted: February 6, 2006  

Suggested Citation

Rao, Ramesh K. S. and White, Susan V., The Creation of FirstCity Financial Corporation: A Clinical Study of the Bankruptcy Process. International Journal of Finance Education, Vol. 1, No. 1, 2005. Available at SSRN: http://ssrn.com/abstract=880762

Contact Information

Ramesh K. S. Rao (Contact Author)
University of Texas at Austin - Department of Finance ( email )
Red McCombs School of Business
Austin, TX 78712
United States
512-475-8756 (Phone)
512-471-5073 (Fax)
Susan V. White
University of Maryland - Department of Finance ( email )
Robert H. Smith School of Business
Van Munching Hall
College Park, MD 20742
United States
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